Slide 1: Investor presentation FY20 results
Investor presentation FY20 results Raj Naran, Managing Director and CEO Luis Damasceno, Chief Financial Officer 27 May 2020 Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 2: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER – This presentation has been prepared by ALS Limited, (ALS or the Company). It contains general information about the Company’s activities as at the date of the presentation. It is information given in summary form and does not purport to be complete. The distribution
Slide 3: Safety is a priority - ALS COVID-19 response
Safety is a priority - ALS COVID-19 response Safety guidance Equipment • Handwashing and sanitation information; • Additional sanitation products and PPE; • Hygiene and routine disinfection information • IT resources to enable virtual meetings and procedures; and remote working; • Screening for, and
Slide 4: FY20 results: Group performance
FY20 results Group performance Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 5: FY20 underlying NPAT of $188.8 million and statutory NPAT of $127.8 million
FY20 underlying NPAT of $188.8 million and statutory NPAT of $127.8 million Underlying performance from continuing operations below • Organic revenue growth of +5.1% (Life Sciences +5.9%, Commodities +0.6%, Industrial +15.2%) Revenue growth • Scope growth (acquisition and divestment) of +1.9% $1,832
Slide 6: Revenue growth components of diversified business streams
Revenue growth components of diversified business streams (at constant currency) % of revenue (3.0%) - 3.0% 6.0% 9.0% 12.0% 15.0% 18.0% Life Sciences: 51% Life Sciences 5.9% 3.3% Geochemistry (1.2%) Metallurgy (2.6%) Commodities: 35% Inspection 6.5% 8.9% Coal 12.1% Asset care 17.6% Industrial: 14% T
Slide 7: Underlying EBIT growth driven by Life Sciences
Underlying EBIT growth driven by Life Sciences (continuing operations) in $m +19 +3 (5) (0) 297.9 281.1 1 2 FY19 Life Sciences Commodities Industrial Others FY20 Margin 16.9% 15.3% 25.3% 9.7% 16.3% PCP +35 bps (172) bps (38) bps (63) bps 1. Corporate costs + FX 2. Underlying EBIT before applying AAS
Slide 8: Underlying EBIT growth driven by accretive acquisitions and FX gains
Underlying EBIT growth driven by accretive acquisitions and FX gains (continuing operations) in $m +16.3 +4.4 (4.0) 297.9 281.1 277.2 277.2 281.5 1 FY19 Organic Scope FX FY20 Margin 16.9% (1.2) pts +0.1 pts +0.5 pts 16.3% 1. EBIT before applying AASB 16 8 Investor Presentation. Full Year Results FY
Slide 9: FY20 financial summary
FY20 financial summary FY19 ($m) FY20 ($m) Full Year Underlying Underlying Restructuring Divestment & Impairment and Applying Discontinued Statutory Underlying* before after & other one- other business amortisation of AASB 16* operations Results AASB 16* AASB 16* off items closures intangibles Reven
Slide 10: Cash flow – strong cash conversion
Cash flow – strong cash conversation Full year ($m) FY19 FY20 Underlying operating EBIT (before AASB 16) 275.6 296.0 50 CASH FROM Depreciation & amortisation 73.3 81.2 million OPERATIONS EBITDA (before AASB 16) 348.9 377.2 Working capital (35.4) (17.9) 97.1% EBITDA Other 2.9 7.0 cash conversion* Cas
Slide 11: CAPEX by business – investing in growth
CAPEX by business – investing in growth in $m CAPEX as % of revenue FY20 FY19 Life Sciences 7.0% 8.3% Commodities 4.6% 5.0% Industrial 5.3% 4.0% 66 30 121 Group infrastructure 0.6% – Total Group 6.6% 6.5% Life Sciences: Green field and growth projects 14 Commodities: Maintenance and geographical exp
Slide 12: Debt metrics – strong balance sheet
Debt metrics – strong balance sheet Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 STATISTICS Gearing Ratio (target <45%) 27% 29% 31% 37% 42% Leverage (net debt/ EBITDA; max 3.25) 1.7 1.9 1.7 1.8 2.1 EBITDA interest cover (min 3.75) 7.7 9.2 11.3 10.5 11.0 BALANCE SHEET MEASURES Total Equity (in $m) 1,186 1,185
Slide 13: Prudent capital management strategy
Prudent capital management strategy Cash flow from operations Dividend Strong underlying EBITDA cash conversion of 97.1% (on-track to Final dividend of 6.1 cps (70% franked), with FY20 payout ratio of 45% achieve 100% cash conversion pre-COVID-19 impact). Reflects prudent capital management st
Slide 14: Strong liquidity in place
Strong liquidity in place Liquidity Cautious approach in the uncertain economic environment, to build business resilience in the short-term while capitalising on growth opportunities in the medium and long-term. Total liquidity available as at 31 March 2020: ~$450m Increase in debt facilities:
Slide 15: Next generation TIC, innovation and technology
Next generation TIC, innovation and technology Life Sciences - Development and roll-out of COVID-19 testing services for humans and surfaces - Robotics in laboratories to improve efficiency. - Artificial intelligence driving data review and reporting. - Web and mobile apps for clients to view their
Slide 16: FY20 results: Review by business stream
FY20 results Review by business stream Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 17: Life Sciences overview – organic and acquisition growth
Life Sciences overview – organic and acquisition growth Total revenue growth of 13.0%, organic Underlying margin of 15.3%, +35 bps vs pcp, driven by All regions delivered organic growth and growth of 5.9%, scope growth of 3.3% productivity improvements – on track to deliver +50bps margin impro
Slide 18: Life Sciences – portfolio and margin evolution
Life Sciences – portfolio and margin evolution in $m 1,000 Environmental 19% Total revenue Food / Pharmaceutical CAGR +10.3% 900 Consumer / Electronics 18% Underlying EBIT Margin 800 700 17% 600 16% 500 15% 400 300 14% 200 13% 100 0 12% FY16 FY17 FY18 FY19 FY20 18 Investor Presentation. Full Year Re
Slide 19: Recent acquisitions performing well
Recent acquisitions performing well ARJ ~$30 m ANNUAL REVENUE • Acquired in August 2019, based in Mexico. • Founded in 1967, annual revenue of ~$30m, 500 employees. • Largest private pharmaceutical testing laboratory in Latin America. • Strong performance since acquisition. Aquimisa ~$35 m ANNUAL RE
Slide 20: Life Sciences outlook – managing cost base and new product development
Life Sciences outlook – managing cost base and new product development Leverage ‘hub and spoke’ model to manage cost base across all businesses and geographies. Ongoing focus on productivity improvement and efficiencies from innovation including data analytics from production management platform
Slide 21: Commodities overview – organic growth despite Geochemistry sample flow decline
Commodities overview – organic growth despite Geochemistry sample flow decline Geochemistry Metallurgy Inspection Coal Sample volumes down 9% vs Revenue decline of 2.6% vs pcp due Revenue growth of 18.6% vs pcp, Revenue growth with increasing pcp primarily driven by lack to strong prior peri
Slide 22: Geochemistry – early signs of growth in mining activity before COVID-19
Geochemistry – early signs of growth in mining activity before impact of COVID-19 400,000 ALS Global mineral sample flow (trailing 52 week running average) and global exploration spend 24 350,000 21 Average Weekly Sample Flow Global Exploration Spend USD bn 300,000 18 Relative Gold Price in USD 250,
Slide 23: Geochemistry – sample flow growth before impact of COVID-19 pandemic
Geochemistry – sample flow growth before impact of COVID-19 pandemic ALS Global mineral sample flow (two week growth trend) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 '20 Oct-06 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11 Oct-12 Oct-13 Oct-14 Oct-15 Oct-16 Oct-17 Oct-18 Oct-19 Jan-
Slide 24: Junior and intermediate fund raisings and pipeline activity showing improvement
Junior and intermediate fund raisings and pipeline activity showing some improvement Junior and intermediate financings, March 2018 – April 2020 Project drilling activity by commodity, March 2018 – April 2020 Amount raised Gold financings Number of Number of distinct projects drilled Number of repor
Slide 25: Commodities – long-term strategy unchanged
Commodities – long-term strategy unchanged Geochemistry using ‘hub and spoke’ model aligning cost base with client demand. Long-term strategy remains unchanged with growth through new opportunities (including mine sites) and innovation. Metallurgy continues to see solid ongoing demand for gold,
Slide 26: Industrial overview – organic growth in FY20 with challenging market ahead
Industrial overview – organic growth in FY20 with challenging market ahead Asset Care Tribology Total revenue growth of 19.4%, with strong organic growth of 17.6% Total revenue growth of 12.9%, organic revenue growth of 9.1%. Australia growth driven by maintenance revenue from energy and Aus
Slide 27: Industrial outlook – rationalisation and leveraging innovation
Industrial outlook – rationalisation and leveraging innovation Asset Care Cost reduction and rationalisation initiatives to protect margin. Concentrate business development efforts on markets not significantly impacted by COVID-19 pandemic. Tribology Continue to execute on global business deve
Slide 28: Group FY20 performance vs strategic priorities
Group FY20 performance vs strategic priorities Shorter-term strategic priorities FY20 performance Life Sciences • 5.9% organic growth. Strong organic growth and margin expansion (pre AASB 16 impact) • +35 bps margin improvement vs FY19 (on track to deliver +50bps pre-COVID-19). across all regions •
Slide 29: History of ALS revenue mix – increasing diversity
History of ALS revenue mix (from continuing operations) – increasing diversity 2.00 Total revenue CAGR +12.9% 1.80 CAGR +23.2% 1.60 1.40 1.20 $ billion 1.00 0.80 0.60 0.40 0.20 0.00 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 Commodities Life sciences Industri
Slide 30: FY20 results: Managing through COVID-19
FY20 results Managing through COVID-19 Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 31: Managing through COVID-19
Managing through COVID-19 Industry-leading safety performance. Strong balance sheet with ~$650 million of liquidity available including ~$200 million increase to existing facilities agreed with bank debt providers. Swift action taken by management to align cost base with client demand while main
Slide 32: Managing through COVID-19
Managing through COVID-19 Decision to impair Latin American Life Sciences business reflects enhanced risk profile of market, particularly in Brazil and Peru, due to ongoing socioeconomic issues, prolonged impact from COVID-19 and material devaluation of currencies. Impairment to Industrial divisio
Slide 33: FY20 results: Financial appendix
FY20 results Financial appendix Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 34: One-offs, amortisation and impairment of intangibles – FY20
One-offs, amortisation and impairment of intangibles – FY20 Restructuring and Other One-Off Items Amortisation and Divestment & Impairment of Other One- in $m Start up Restructure Acquisition Other Business Total Intangibles off Items Closures Commodities - (0.9) (0.1) (1.1) - (2.0) Life Sciences (6
Slide 35: Corporate cost evolution
Corporate cost evolution H1 FY18 H2 FY18 H1 FY19 H2 FY19 H1 FY20 H2 FY20 Corporate costs* 12.4 14.1 18.2 18.8 19.7 19.4 Revenue 721.6 725.3 826.1 838.7 919.1 912.8 Corporate costs % on revenue 1.7% 1.9% 2.2% 2.2% 2.1% 2.1% * exclude net foreign exchange gain or loss. • FY20 absolute cost increase ma
Slide 36: Underlying effective tax rate movement
Underlying effective tax rate movement FY20 Change $m After AASB 16 FY19 YoY Underlying profit before tax (from continuing operations) 264.5 249.1 6.2% Tax (74.0) (67.1) 10.3% Underlying effective tax rate (ETR) 28.0% 27.0% 1.0 pts FY20 vs FY19 • Increase in underlying ETR driven by changes to the a
Slide 37: Net debt evolution
Net debt evolution 14 800 129 700 88 800 600 22 500 246 112 629 67 119 400 300 200 31 Mar 2019 Net Free cash Flow Acquisitions Divestments Dividends paid Issued capital FX Interest and Tax Restructuring 31 March 2020 Debt bought back costs Net Debt 37 Investor Presentation. Full Year Results FY 2020
Slide 38: Sustainability program – FY20 achievements
Sustainability program – FY20 achievements Health & Safety Innovation & Technology People Safety is a Priority Embracing innovation 11% improvement in total recordable injury frequency rate and technology (record low injury rate). Diversity & equality Improved employee satisfaction survey result
Slide 39: alsglobal.com
Right Solutions • Right Partner alsglobal.com 39 Investor Presentation. Full Year Results FY 2020. Right Solutions • Right Partner